Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
Find Stocks Now

Tesla falls in premarket as 1Q deliveries fall short of Musk's target

Published 04/03/2023, 04:34 AM
Updated 04/03/2023, 05:18 AM
© Reuters.

By Geoffrey Smith

Investing.com --- Tesla (NASDAQ:TSLA) stock fell in premarket trading on Monday after the electric carmaker's deliveries in the first quarter indicated the strain of growing competition.

Tesla said on Sunday it had delivered a record 422,875 vehicles in the first quarter of the year, up 4% from the previous three months and up 36% from the same quarter in 2022.

However, it was well short of the target that Chief Executive Elon Musk has set for the company this year. Musk had said on the company's largest earnings call that Tesla would deliver 2 million vehicles this year, which would represent growth of over 50%.

The number was somewhere in the middle of a wide range of estimates that reflected high uncertainty, and was below survey estimates published by Reuters and FactSet, but above Bloomberg's.

They come against the backdrop of a slowing economy and intensifying price competition - notably in China, the world's largest market for electric vehicles. Tesla had slashed its prices in January in response to sluggish demand, but the price cuts of as much as 20% do not appear to have revived it to the extent hoped. That's partly because rivals such as Xpeng (HK:9868) (NYSE:XPEV) and BYD (SZ:002594) (OTC:BYDDY) also cut prices aggressively in the wake of Tesla's move.

Affordability has become more important for Tesla in recent months as high inflation and a rise in layoffs across high-paying sectors of the U.S. economy such as technology and finance have started to hurt its core customer base. While it was a big beneficiary of the Inflation Reduction Act which extended subsidies for electric vehicles last year, it stands to lose some access to tax credits later this month as new U.S. rules that aim to reduce Chinese content in electric cars come into effect.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Tesla stock was down 2% by 05:10 ET (09:10 GMT), a moderate correction after a 50% rally from the lows of late 2022. It has still lost around half of its value since peaking in November 2021, due largely to higher interest rates and to successive sales of large blocks of shares by Musk in order to finance his acquisition of social media site Twitter.

Latest comments

Tesla can 'plan' jobs layoff to rebound the shares or predict a rosy growth in 2025.. ...its the most effective way to push the shares up without any fundamental.......
Record deliveries though just not good enough for analysts i guess
Not if they don’t meet growth expectations or management forecasts… the growth needs to match the growth implied in the share price.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.